Environmental, Social and Governance (ESG) Report 2020

Environmental, Social and Governance (ESG)

Report 2020

Contents

Message from our CEO

Our Guiding Principles

Our Global Presence

Our Journey to Date

Governance

Environmental

Social

Community

Customers

Investing Responsibly

Key 2020 Achievements

Conclusion

Note: All financial disclosure in this presentation is, unless otherwise noted, in US$ Page 2

Message from our CEO

Page 3

Prem Watsa

Chief Executive Officer

Since the inception of Fairfax in 1985, we have always been focused on a few things – the way we operate, the way we treat each other and the way we do

good by doing well for our communities. In fact, our culture is so ingrained within our company, that our name itself means “fair and friendly”.

Long before companies had ESG reports, we recorded our dedication and commitment to operating in this manner through our Guiding Principles. Our

management team and Board ensures full disclosure is provided to all stakeholders and that honesty and integrity is never compromised. More than three

decades and many acquisitions later, we now have 15,000 employees around the world thriving in our decentralized environment – exercising their talents

toward individual business objectives, while collectively supported and driven by our unique and lively culture.

We know it’s impossible to live and work in one area of the world and expect to know all the needs and opportunities in another and that’s why our many

company leaders – most of whom have been with their company for over 20 years – are fully empowered and trusted to make the best decisions for their

employees, clients and communities. This not only minimizes bureaucracy; it minimizes our carbon footprint by keeping things local.

Loyal, results-oriented and team players – our leaders don’t have egos and are always willing to collaborate and share their knowledge and expertise with their sister companies. This allows our

operating companies to increase their value propositions, push business forward in innovative ways and enhance the employee experience more efficiently.

We empower all employees to use their talent to drive results and to feel fulfilled by the work they contribute, within the context of the Guiding Principles. Plus, with our employee share

ownership plan, a large number of our employees are truly owners – financially and emotionally invested in our collective success!

Whether you read one of my first letters to shareholders or a more recent one, you’ll always find the same theme – our employees are our most important asset and we deeply care about them.

In 1985, I wrote about the integrity displayed by the Markel family that drew me to sign Fairfax’s first acquisition, and during my first 2020 quarterly results call, I announced that Fairfax and its

insurance companies would not be laying off any employees due to COVID-19 (in fact, we’re currently hiring!).

We trust our employees because we know them – we hire people who share our values and we give them the space to practise them daily. We don’t believe there is a “work self” and a “home

self” because we encourage and expect our employees to be authentic and honest – and to carry themselves with integrity no matter what they are doing. This level of respect is felt in all

corners of our companies and like all families, we take significant measures to protect and safeguard the well-being of our members.

That level of care extends beyond our companies. All over the world, our employees are constantly coming up with new ways to serve the communities in which we operate. Whether it’s Fairfirst

hosting online webinars to promote safer school environments for kids in Sri Lanka or Northbridge Financial employees planting trees in Canada, the Fairfax family has been giving back since we

started. To date, we’ve donated $215 million and we look forward to continuing to grow with our communities – with a target of 1-2% of our pre-tax earnings going to charitable causes.

We believe in doing good by doing well and 2020 has proven that no matter what we face, our commitment to our culture will always withstand any uncertainty. We’re always looking for new

ways to increase our value for the long-term benefit of our customers, employees, shareholders and communities in which we do business.

Our Guiding Principles

Page 4

Our guiding principles were first drafted in 1987 and hold true today.

OBJECTIVES:

• We expect to compound our mark-to-market book value per share over the long term by 15% annually by running Fairfax and its subsidiaries for the long-term benefit of customers, employees, shareholders and the communities where we operate – at the expense of short-term profits if necessary.

• Our focus is long term growth in book value per share and not quarterly earnings. We plan to grow through internal means as well as through friendly acquisitions.

• We always want to be soundly financed.• We provide complete disclosure annually to our shareholders.

STRUCTURE:

• Our companies are decentralized and run by the presidents except for performance evaluation, succession planning, acquisitions, financing and investments, which are done by or with Fairfax. Investing will always be conducted based on a long-term value-oriented philosophy. Cooperation among companies is encouraged to the benefit of Fairfax in total.

• Complete and open communication between Fairfax and subsidiaries is an essential requirement at Fairfax.• Share ownership and large incentives are encouraged across the Group.• Fairfax will always be a very small holding company and not an operating company.

VALUES:

• Honesty and integrity are essential in all our relationships and will never be compromised.• Weare results oriented – not political.• We are team players – no “egos”. A confrontational style is not appropriate. We value loyalty – to Fairfax and our colleagues.• Wearehard working but not at the expense of our families.• We always look at opportunities but emphasize downside protection and look for ways to minimize loss of capital.• We are entrepreneurial. We encourage calculated risk taking. It is all right to fail but we should learn from our mistakes.• We will never bet the company on any project or acquisition.• We believe in having fun – at work!

Zenith

NorthbridgeOdyssey Group

Crum & Forster

Southbridge Colombia

Fairfax Brasil

Southbridge Chile Southbridge Uruguay

La Meridional

Bryte

Fairfirst

AMAG

Alltrust

Falcon HKBIC

Falcon Thailand

Pacific

Gulf

Brit

Allied WorldEurolife

Polish Re

Colonnade

Digit

ARX

Universalna

Over $17.5 billion in gross premiums written in 2019

Our Brands

Page 5

Our Global Presence

Established presence in 40+ countries,

across 6 continents

Our Journey to Date

Page 6

Prem Watsa refinanced a small Canadian insurance holding company in 1985 and changed the name to Fairfax Financial HoldingsLimited, which was derived from the principles of fair and friendly, based on the golden rule of treating everyone as we want to be treatedourselves.

Our philosophy is simple: to do well for our shareholders, over the long term, by treating our customers and our employees well and giving backto the communities in which we do business.

Through fair and friendly acquisitions, Fairfax has grown from a small Canadian trucking insurer into a leading global commercial lines insuranceand reinsurance group, compounding book value per share by 19%+ annually since 1985, through a dual focus on underwriting profitability andtotal-return value investing.

(in USD millions) 1985 2019

Net premiums written $10 $13,261

Investment portfolio $ 24 $39,005

Common shareholders’ equity $ 8 $13,043

19.3% Book Value per Share CAGR since 1985

Governance

Governance Structure

Page 8

Fairfax has in place corporate governance practices that comply with allapplicable rules and policies of the Canadian Securities Administrators and thepractices set out therein.

The company's Board of Directors has adopted a set of Corporate GovernanceGuidelines (which include a written mandate of the Board), established an AuditCommittee, a Governance and Nominating Committee and a CompensationCommittee, approved written charters for all of its committees, approved aCode of Business Conduct and Ethics and a Policy on Discrimination applicableto all directors, officers and employees of the company and established, inconjunction with the Audit Committee, a Whistleblower Policy.

We operate under a decentralized model with one chairman and CEO at theholding company, a Board-appointed Lead Director to ensure the independentfunctioning of the Board and empowered CEOs running each of our 20+operating companies autonomously at the local level. Being close to thebusiness allows them to make the right decisions quickly versus relying on adisconnected home office. We believe there are many benefits to thissomewhat unique structure. Not only does it reduce bureaucracy andheadcount at the home office but it also creates a separation of powers thatenhances our spread of risk, gives each CEO operating control of that CEO’scompany, allows for internal peer review at each company and creates anunmatched breadth of global senior talent.

Our Board

Page 9

Our Board consists of 12 directors, with extensive business experience, 11 of

whom are non-management and 3 of whom are female.

The Board of Directors holds regularly scheduled meetings to discuss long term

objectives and strategy. Other mandates of the Board include evaluating

performance of our management team against the Guiding Principles and

corporate objectives, succession planning and ensuring that it understands the

principal risks of the business and that appropriate systems to manage these

risks are in place and effectively implemented.

The Compensation Committee of the Board of Directors annually reviews the

compensation of the CEO and senior executives in order to align compensation

with our overall business objectives.

Recognizing that diversity is essential and beneficial for introducing different

perspectives into discussions and decision making, the Board has

acknowledged the existence of anti-Black systemic racism, and to ensure that

Fairfax combats this, we have signed up to the BlackNorth Pledge, and Prem

Watsa sits on the BlackNorth Initiative Board of Directors to ensure an active

leadership role from a Fairfax perspective.

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Environmental

Our Commitment to the Environment

Page 11

Of the 6,100 companies that traded on the NYSE, AMEX and Nasdaq at the end of 1985,only 677 are still trading on these exchanges at the end of 2019. Almost 90% have gonebankrupt, have been taken over or merged, etc. We are blessed to be in the categorythat have survived. We are here for the long term and are fully committed to protectingour world’s environment upon which we and the generations to follow depend.

Fairfax takes a long-term approach to its business, and consequently views climatechange as being a substantial risk for its business over the long term. Fairfax isconstantly monitoring the effects of climate change on its customers, including how itcan assist them in dealing with, and mitigating, their exposure to climate risk. Fairfaxcontinually monitors its exposures from climate change, especially relating to the effectsit has on changes in weather patterns which may increase the frequency or severity offlooding, fires and storms.

The past 12 months have been difficult and we have worked hard to adapt. Alongsidedealing with the COVID-19 challenges, we have also embraced and brought forward anumber of environmental initiatives, including the acceleration of paperless initiativesacross the group as we continue to leverage new technologies. We are also mindful ofthe environment in construction and refurbishment projects, an example being the ecodesign of Crum & Forster’s new head office.

As we continue to focus on the reduction of our carbon footprint, a number of ouroperations have also been proactive in partnering with ecological organizations.

Allied World and the National Wildlife Federation

Page 12

Allied World is committed to protecting people and property and natural approaches havebeen proven to be an effective and sustainable way to reduce risk, while also protecting wildlifeand natural habitats. For many years, Allied World has worked alongside the National WildlifeFederation (NWF) to develop research reports related to the environment.

The new report, The Protective Value of Nature, synthesizes the latest science from across theUnited States, evaluating the performance of natural systems such as wetlands and forests inthe face of hurricanes, floods, wildfires, and other natural disasters. As the 2020 hurricaneseason was beginning and the risk of wildfires and Midwest flooding were mounting, the reportalso recommended solutions for increasing community resilience.

“In an era where natural disaster risks continue to mount, we find that there is a significantopportunity to expand the use of natural approaches to protect people and property,” said WesDupont, Chief Operating Officer of Allied World Group. “The science and success stories in thisreport demonstrate that natural defenses are effective — upending perceptions aboutconventionally engineered approaches being superior to working with nature.”

Working together with the NWF is one way Allied World can gain a better understanding ofhow natural systems can be used as a risk mitigation tool. This is an important issue, not onlyfor our business but for each of us as individuals. In addition to the research report above, LouIglesias, CEO of Allied World, contributed to an opinion piece with Collin O’Mara, CEO of NWF.That piece, Sow Nature’s Lessons, Reap Better Protection, was republished by The Hill and Risk& Insurance publications.

Northbridge and Tree Canada

Page 13

Since 2014, Northbridge has worked with Tree Canada to plant and maintain treesacross the country to help create greener communities. Below are the programs wewere involved in last year:

45 employees participated in Tree Canada’s restoration and naturalization project,planting 175 trees and shrubs to help combat invasive species. The trees wereplanted to increase the forested areas of the park and create a wildlife habitat.

This innovative community centre in Calgary is working to transform its outdoorspace by planting a food garden for community members and programparticipants. The harvested produce will be used in drop-in meals, events, andprograms while enhancing community engagement. A team of employees helpedplant 47 fruit-bearing trees and plants to feed their community.

In Winnipeg, our employees worked tirelessly to plant over 125 trees to enhancethe FortWhyte Farms Solar Power Pollinator Garden. The new trees will helpnurture important native and domestic pollinator habitats. The goal is to raiseawareness of the importance of pollination and increase community interactionwith new urban green space. The trees will also help with carbon sequestrationand create food security.

Partners in Planting, Transforming Tommy Thompson Park in Toronto

Feeding our communities, The Alex Community Food Centre and Community Garden

Tree Planting on FortWhyte Farms

Further Environmental Initiatives across Fairfax

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Company Location Initiative

AMAG Indonesia AMAG has implemented a Go Green campaign in the workplace to educate and raise awareness on environmental preservation.

Bryte South Africa Bryte subscribes to and supports the local Earth Probiotic Environmental Policy.

Odyssey Group USA Odyssey has implemented Right Signature, an integrated paperless approval process.

SBS Colombia SBS started “SBS Se Mueve”, a carpooling initiative to reduce excess carbon pollution, and received sustainability recognition from its local association, FASECOLDA, for reducing CO2.

Zenith USA Zenith has participated in an initiative providing support to The Tree People organization.

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Social

The Social Context

Page 16

Fairfax is a global organization with a presence across 6 continents and withover 15,000 employees. We are proud to have a strong and varied ethnic mix,as we believe diversity and inclusion make us stronger. 71% of our employeeshave access to inclusivity and diversity programmes and 93% have access towellness programs.

We have longstanding relationships with The Cleveland Clinic and Johnson &Johnson. The Cleveland Clinic has met with the senior management of ourlargest organizations to offer innovative solutions for employee wellnessincluding assessments of current programs, executive physicals, virtual careand second opinions.

Fairfax’s gender split is 53% female to 47% male. A number of our subsidiariesare strong leaders in gender diversity, maintaining a representative gendersplit ratio within all levels of their management teams. When measured at theexecutive level across the entire Fairfax family the average subsidiary executivecomposition is approximately 25% female. We continue to explore ways toimprove this split by way of programs and policies throughout theorganization.

Our Employees at a Glance

Page 17

Canada11%

U.S40%

Latam7%

Asia16%

Africa6%

Europe19%

1,000+500-1,000250-500100-2501-100

15,000+employees worldwide

53% women

47% men

~25%executive positions

held by women

8.6% turnover

Employee Engagement

Page 18

All employees are encouraged to be owners of our company through ouremployee share ownership plan, under which employees’ share purchasesby way of payroll deduction are supplemented by contributions from theiremployer.

Over 4,800 employees worldwide currently participate in the plan.

This plan has provided employees with great returns over the long term,as shown below:

5 Years 10 Years 15 Years 20 Years

Since

inception

Employee Share Ownership Plan 12% 12% 13% 12% 14%

S&P 500 (TR) 12% 14% 9% 6% 11%

S&P/TSX Composite (TR) 6% 7% 7% 6% 8%

Compound Annual Return

Our Offerings to Employees

Page 19

Our employees are our most importantasset, and consequently our companiesoffer a wide range of programs tosupport our people and keep themhealthy, happy and fully engaged. Wehave made many acquisitions, andalthough sometimes it takes time innewly acquired companies to getprograms in place, we have made greatstrides in recent years, and we are alwaysstriving for improvement.

100% 97% 93% 92%

79%71%

66%

3% 7% 8%

21%29%

34%

0%

20%

40%

60%

80%

100%

Learning anddevelopment

programs

Educationalassistance

Wellnessprogram

Remote orflexible work

options

Employeeengagement

survey

Diversity andinclusivityprogram

Traineeprogram

Available Not Available

Brit Celebrates the Difference

Page 20

For the past four years, Brit has run its Celebrate the Difference week,

which highlights that everyone at Brit is unique, different and valued. The

key message is that Brit celebrates that individualism and wants everyone

to feel comfortable bringing their whole self to work. The week typically

consists of training and talks by high profile individuals, as well as an

opportunity for Brit to update staff on its charity and corporate social

responsibility (CSR) work.

Training in 2020 covered mental health, respect in the workplace, and

how to achieve balance in life.

The 2020 Celebrate the Difference week was different as it was held

virtually, but that meant Brit was able to reach more people, as all

colleagues had the opportunity to hear the same talks at the same time

wherever they were located. Many commented that watching someone

tell their story on a screen was powerful as they felt the person was

talking directly to them. There was also a healthy amount of questions

and record attendance, meaning that going forward Celebrate the

Difference will continue to have a virtual access element – making it a

truly inclusive event.

Bryte – Building a Nation that Embraces Diversity

Page 21

In just 26 years, the progress made by South Africans in building a society free

from discrimination has been tremendous. Often cited as one of the most

progressive globally, its Constitution (which continues to garner much praise

around the world) remains the most valuable proponent in driving the

country’s evolution.

While the journey ahead is not without its obstacles, the intent of its citizens

and enabling behaviors to create a just and equal society make the country a

beacon of hope for so many. This is a badge it wears with pride.

Appreciating that active and sustained participation from its people is critical

to achieving the change envisaged, Bryte Insurance remains deeply invested in

its role in this process. Bryte continues to lead by example and consistently

advocates for transformation and progressive change.

Recently, Edwyn O’Neill, CEO of Bryte, and Collin Molepe, Deputy CEO of Bryte,

joined Brit for a very informative discussion on the critical importance of

diversity and inclusivity. This thought-provoking discussion provided a

balanced view of realities focused on their personal experiences and outline

their perspective on what is required to accelerate transformation in a

meaningful and sustainable manner.

Further Social Initiatives Across Fairfax

Page 22

Company Location Initiative

Bryte South Africa Bryte has been certified with the Top Employer Certification Programme in 2019.

Crum & Forster USA Crum & Forster was awarded the American Heart Association 2020 Workplace Health Achievement –Silver Level, a recognition by the American Heart Association of the company’s implementation of quality workplace health programs and culture of health best practices. Furthermore, Crum & Forster was awarded The Dave Thomas 100 Best Adoption Friendly Workplaces 2020. The Dave Thomas Foundation for Adoption released its 14th annual Best Adoption-Friendly Workplaces list, recognizing organizations with the most robust adoption benefit programs.

La Meridional Argentina La Meridional has in place a recognition program for employees who best represent the principles and values of the company.

Northbridge Canada Northbridge’s Leadership Essentials programme is offered to all aspiring leaders annually.

Riverstone USA Riverstone participates in the Great Place to Work Survey every two years. In 2020, their results increased 10%, resulting in 86% of their employees believing Riverstone is a Great Place to Work.

Southbridge Chile Southbridge placed 28th among all companies in Chile in the Best Places to Work for Young Professionals.

23

Community

0

5

10

15

20

25

1990 1995 2000 2005 2010 2015

Year

(in US$ millions)

We Care about Helping

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In 2019 we supported over 1,400 charities with donations of over $22 million. Thisbrings our cumulative total to over $215 million, and excludes the personal donationsand time given by our leaders and employees.

Our history of donations is consistent and entrenched in our culture, furtherevidenced by strong employee engagement in our charitable initiatives and donations.

Annual donations – Over $215 million donated since inception

Dialysis Initiative in India

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Our Commitment

The Fairfax Group, led by Thomas Cook India, has committed to coordinate the resourcesrequired to deploy 1,000+ free-to-use dialysis machines and support more than 200+ dialysiscentres across India.

We will help create a complete ecosystem to support the self-sustenance of the dialysiscentres, which in turn would provide free/affordable quality dialysis to needy patients inareas where there are limited or no dialysis facilities.

Our Focus

• Improve access to dialysis• Reduce cost• Improve disease outcome

514machinesinstalled

98dialysis centers

supported across 16 states

315,000+Free/affordable dialysis sessions

Polish Re – Donating Funds and Fruit

Page 26

Polish Re usually gets fresh fruit delivered twice a week to the

office for their employees. With everyone working from home,

instead of cancelling the order, Polish Re decided to divert the

fruit deliveries to healthcare workers at a local hospital.

The company also donated $120,000 to the public health

system in Poland. The first installment will help support the

development of COVID-19 testing in the country.

Further Charitable Initiatives across Fairfax

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Company Location Initiative

Bryte South Africa To address the financial impact of COVID-19, Bryte established the Bryte Cares COVID-19 Relief Fund. This involved the Bryte executive team sacrificing 30% of their salaries over a three-month period in 2020.

Crum & Forster USA Crum & Forster supports the Jersey Battered Women’s Shelter, whose mission is the prevention of domestic violence through the protection and empowerment of the victim and the rehabilitation of family members.

Falcon HK Hong Kong Falcon Hong Kong support Caritas, a charity that offers relief and rehabilitation services to the poor and the distressed in Hong Kong.

Polish Re Poland Since 2011, Polish Re has supported the Educational Centre for Blind Children in Laski and throughout Poland.

Riverstone USA Riverstone fully subsidizes the four-year university costs for one student every four years.

Zenith USA Zenith supports Thrive Scholars (formerly known as South Central Scholars), a national organization that provides scholarships and mentoring programs designed for high-achieving low income students of colour before and throughout college.

Customers

Our Customers

Page 29

We are acutely aware we exist because of our customers.

Without them, none of the initiatives listed here would be

possible. As we support and serve our customers, we have

developed many services to ensure their satisfaction.

In 2019, our operating companies paid $10.6 billion in claims

and performed 46,000 customer risk surveys. Our direct writing

companies also offer training courses and/or educational

programs and materials for their customers.

Technology is being used to improve the customer experience

by a number of our companies, so as to ensure customer

recognition and we have received several awards across the

group.

Northbridge – Designed with the Customer in Mind

Page 30

TruShield Insurance, a direct-to-consumer digital brand, launched with Lucy in 2017. Fun, young and

sometimes a bit sassy, Lucy helps build trust with TruShield’s small business customers by answering their

questions and servicing their needs online, often outside of business hours. “We know a lot of our

customers are building their startups on the side or after they finish their day jobs,” said Julia Cook,

Director of Customer Insights and Innovation at Northbridge. “So, it’s important for us to be able to

provide peace of mind and support 24/7,” said Julia.

Lucy’s peak hours are 3 p.m. - 4 a.m. and that data really speaks for itself. When you think about a

prospective client using a traditional model where they need to call and leave a message and it can

sometimes end up taking a day or two to connect with an agent, in a competitive market, that time-saving

is invaluable. After the success and insights of Lucy, the Customer Insights and Innovation team welcomed

a second bot in February 2019 – Bridget from Northbridge Insurance. Unlike TruShield, Northbridge is a

broker-channel brand, and last year nearly 40% of Bridget’s conversations were with brokers.

While Bridget still gets a lot of leads from prospective customers, the fact that so many brokers are using

the chatbot to find information means that Northbridge can tailor the experience of the bot to both user

groups. Bridget’s tone is more traditional and professional, much like Fred from Federated Insurance. They

also have similar capabilities and goals – to provide support for questions and collect personal information

to connect prospective customers with an agent or broker in their region. Fred, built from the same

technology as Lucy from TruShield and Bridget from Northbridge, now represents Federated online. By

freeing up call center agents, the bots not only help improve the customer experience by getting answers

to them quickly – they also enable agents and brokers to have the time to focus on more complex

situations, giving them the time and care they deserve.

Brit – Helping our Customers

Page 31

Ki, the first fully digital and algorithmically-driven Lloyd’ssyndicate, was launched by Brit in 2020. Ki allows brokers toplace business anywhere, at any time.

Ki will aim to significantly reduce the amount of time andeffort taken for brokers to place their follow capacity, creatinggreater efficiency, responsiveness and competitiveness.

Brit is a member of the Geospatial Intelligence Center (GIC).GIC provides its members with high resolution imagery of thecontinental US both pre and post any natural disaster.

GIC can provide imagery within 36 hours of an event, allowingBrit and its third-party administrators to conduct detailedinspections of damaged property remotely.

In some cases, this allows Brit’s claims adjusters to make claimdeterminations without the need for a physical inspection ofan insured location, allowing faster claims adjustment andpayment.

Investing Responsibly

Investing Responsibly

Page 33

Environmental, social and governance issues are important factors in our investmentanalysis and decision-making process. Deficiencies or excessive risk in these areas couldlead to the rejection of investment opportunities or the sale of existing positions. As isthe case for our own business, good governance and the honesty and integrity ofmanagement is of the utmost importance and the assessment of the managementteam of a business is a key component of our investment analysis.

In some cases, climate change or other environmental issues will be a risk to a business– perhaps as products are phased out, capital expenditures increase to comply withstricter environmental laws, carbon taxes reduce demand, new technology createssubstitutes for a company’s high carbon footprint products, etc. Environmental risk isviewed as a category of business risk, and it is part of the overall decision-makingprocess when assessing an investment. Social factors, including diversity and inclusionin the workforce and respect for human rights, are also considered when analyzing acompany, its industry and the geographic locations in which it operates.

Our investment portfolio is approximately $37 billion and held principally in ourinsurance and reinsurance subsidiaries. Each subsidiary has an investmentmanagement policy in place with our wholly owned investment manager, HamblinWatsa, and investments must satisfy all regulatory policies and limits established inevery jurisdiction in which we do business.

A large proportion of our investment portfolio is held in cash, short-term securities orgovernment bonds – which today represent approximately 50% of the portfolio. Theseinvestment classes typically have less exposure to environmental, social andgovernance issues.

(1) Investment assets shown exclude Fairfax India and Fairfax Africa cash and portfolio investments; common stocks includes investments in associates at carrying value

Key 2020 ESG Achievements

Page 34

Supported over 1,400

environmental and social initiatives

Donated to many worthy causes

despite a difficult 2020

Adapted rapidly to COVID-19 while fast

tracking environmental initiatives

Signed the BlackNorth Pledge

Conclusion

Page 35

ESG has been a meaningful factor since Fairfax began in 1985, as a natural component of its special fair and friendly culture. So much sothat we never thought about writing about it separately. This report has now done that for the first time, demonstrating in some detailthe importance of ESG at Fairfax.

There is always room to grow and improve, and Fairfax will continue to expand its ESG initiatives in 2021 and beyond.

E S G

Forward-Looking Statements

Certain statements contained herein may constitute forward-looking information (within the meaning of Canadian securities legislation) and forward-looking statements (within themeaning of the United States Private Securities Litigation Reform Act of 1995). These statements can be identified by expressions of belief, expectation or intention, as well as thosestatements that are not historical fact. Forward-looking statements are based upon assumptions, estimates, opinions and analysis made by management in light of its experience,current conditions and its expectations of future developments that management believe to be reasonable and relevant, and are subject to known and unknown risks, uncertaintiesand other factors which may cause the actual results, performance or achievements of Fairfax to be materially different from any future results, performance or achievementsexpressed or implied by such forward-looking statements. Such factors include, but are not limited to: a reduction in net earnings if our loss reserves are insufficient; underwritinglosses on the risks we insure that are higher or lower than expected; the occurrence of catastrophic events with a frequency or severity exceeding our estimates; changes in marketvariables, including interest rates, foreign exchange rates, equity prices and credit spreads, which could negatively affect our investment portfolio; risks associated with the globalpandemic caused by COVID-19, and the related global reduction in commerce and substantial downturns in stock markets worldwide; the cycles of the insurance market and generaleconomic conditions, which can substantially influence our and our competitors' premium rates and capacity to write new business; insufficient reserves for asbestos, environmentaland other latent claims; exposure to credit risk in the event our reinsurers fail to make payments to us under our reinsurance arrangements; exposure to credit risk in the event ourinsureds, insurance producers or reinsurance intermediaries fail to remit premiums that are owed to us or failure by our insureds to reimburse us for deductibles that are paid by uson their behalf; our inability to maintain our long term debt ratings, the inability of our subsidiaries to maintain financial or claims paying ability ratings and the impact of adowngrade of such ratings on derivative transactions that we or our subsidiaries have entered into; risks associated with implementing our business strategies; the timing of claimspayments being sooner or the receipt of reinsurance recoverables being later than anticipated by us; risks associated with any use we may make of derivative instruments; thefailure of any hedging methods we may employ to achieve their desired risk management objective; a decrease in the level of demand for insurance or reinsurance products, orincreased competition in the insurance industry; the impact of emerging claim and coverage issues or the failure of any of the loss limitation methods we employ; our inability toaccess cash of our subsidiaries; our inability to obtain required levels of capital on favourable terms, if at all; the loss of key employees; our inability to obtain reinsurance coveragein sufficient amounts, at reasonable prices or on terms that adequately protect us; the passage of legislation subjecting our businesses to additional adverse requirements,supervision or regulation, including additional tax regulation, in the United States, Canada or other jurisdictions in which we operate; risks associated with government investigationsof, and litigation and negative publicity related to, insurance industry practice or any other conduct; risks associated with political and other developments in foreign jurisdictions inwhich we operate; risks associated with legal or regulatory proceedings or significant litigation; failures or security breaches of our computer and data processing systems; theinfluence exercisable by our significant shareholder; adverse fluctuations in foreign currency exchange rates; our dependence on independent brokers over whom we exercise littlecontrol; impairment of the carrying value of our goodwill, indefinite-lived intangible assets or investments in associates; our failure to realize deferred income tax assets;technological or other change which adversely impacts demand, or the premiums payable, for the insurance coverages we offer; disruptions of our information technology systems;assessments and shared market mechanisms which may adversely affect our insurance subsidiaries; and adverse consequences to our business, our investments and our personnelresulting from or related to the COVID-19 pandemic. Additional risks and uncertainties are described in our most recently issued Annual Report, which is available at www.fairfax.ca,and in our Base Shelf Prospectus (under “Risk Factors”) filed with the securities regulatory authorities in Canada, which is available on SEDAR at www.sedar.com. Fairfax cautionsreaders not to place undue reliance on these forward-looking statements, which speak only as of their dates. Fairfax disclaims any intention or obligation to update or revise anyforward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law.

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